What is "Mother-Candle" Strategy? Read Now (2024)

Traders try to frame a complicated strategy by combining many indicators and during trading, they miss out on something and then later regret when due to spur of the moment they trade on a false signal. This is how complicated strategies reduce your accuracy. Therefore, here is a simple, sure shot and lesser-used trading strategy:-

Mother-candle strategy:-

This is formed when panic buying or selling occurs due to any news. This is a very trustable trading strategy.

How to use this:- This is to be used only when a big candle is formed with a big tail. The bigger candle is “mother candle” and then next few candles trades only within the high and low of the candle. This shows the confirmation of the strategy. So, when the breakout is given on either side, that time trade has to be taken.

Like in the above example, Big green candle is formed and then next 6 candles traded only within the mother-candle. Then buy position must have been created when 7th candle gave breakout above the mother-candle’s high. This is fundamentally and technically proven strategy.

Real proof to justify the strategy:- BPCL chart

This is the chart of BPCL when the strategy was activated. It was triggered when the government asked all oil companies to bear a load of crude’s price increment by not increasing the petrol’s price due to which the companies faced losses.

But this news created panic which turned out to be good for our clients because we spotted the “mother-candle” and gave that call to our clients and a big target was achieved that day.

Conclusion:- Keep your strategy simple that you can understand and execute during trading in the market timing.

The RBI meeting tomorrow might create little panic and the upcoming elections will create such panic selling multiple times. So, all traders and investors must know this strategy as such panic selling may give false signals and investors might end up exiting at a very low price. While those who are informed about this strategy will spot the false breakout accurately.

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  Apex Advisors@Apex Advisors

  No, we are from Jaisalmer

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  PURE TRADING@PURE TRADING

  Are you from Indore

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    Apex Advisors@Apex Advisors

    No, we are from Jaisalmer.

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